Sino Grandness

[Oldman9]

Hi Boon

In your post 1123 dated 22nd Jan you said "Also, I don’t see why VAT (for purchase of equipment for factory A) could not be deducted against output VAT (for selling beverage produced by factory B) – if both factory A & B are owned by the same entity.". A day later in post 1127 , you said "I do understand that VAT is not administered on group basis in China".

How can this two statements  be consistent? Friends are  puzzled when you say they are not inconsistent.

Cheers
Oldman9

Hi Oldman9,
 
Let's approach it this way:
 
Company X owns factory A and factory B.
Company Y owns factory C and factory D.
Company X and Y are two separate legal entities owned by Company Z.
 
What is your take on the following two questions? Yes or no, and why?
 
Question 1:
Can input VAT (for purchase of equipment for factory A) be deducted against output VAT (for selling beverage produced by factory D)?
 
Question 2:
Can input VAT (for purchase of equipment for factory A) be deducted against output VAT (for selling beverage produced by factory B)?
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Hi Boon

Hope you are not wriggling out by posing questions back. haha.

Unlike you I am no expert here...but according to Portusers post
"
You may want to refer to page 17 of  "China: Country VAT / Business Tax Essentials Guide 2015" by KPMG which states:

"Is VAT /Business Tax grouping possible?
No - grouping of different legal entities is not generally possible in China:"

So I believe the answer to both your question is No. Maybe you have a better answer.

cheers
Oldman9